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Estimated reading time: 4 minutes

Small businesses have to be especially careful with their marketing budgets. Every penny needs to be accounted for, and every decision needs to be made with profit in mind. So how do you calculate a marketing budget for a small business? It’s not as difficult as it may seem.

Define Your Marketing Goals

Before you can determine how much to invest in marketing, it’s important to define the goals that you want to achieve. Ask yourself what you want to accomplish. Do you want more website visitors, or are you looking to increase brand awareness? Do you need to drive more sales or attract new customers?

Understand Your Market

Once you’ve identified your goals, it’s time to improve your market. What type of industry are you in? B2C or B2B? Who are the biggest players? What are their marketing efforts? How big is their slice of the market?

Now look at your target customers. Who are they? Where are they? Know their key demographics (age, gender, socioeconomic bracket). How do they consume information? Are they internet savvy or are they into traditional media? What are their interests and concerns? Get into their psyche!

The more you know about them, the easier it will be to develop marketing strategies that resonate with them and make budgeting decisions.

Create Your Marketing Strategy

Based on your study, craft a unique value proposition for your product or service, and figure out your messaging and the best way to put a message out, whether it be through a billboard in the city, an internet ad, or an email campaign.

Determine Your Marketing Budget

Your marketing budget should be based on several different factors, including the size of your business, the competitive landscape, and any promotional offers or discounts you may have. Additionally, it’s important to consider ongoing costs such as staffing and overhead expenses that will influence your budget.

With all the necessary information on hand, you can now figure out how much you should spend. There are a few common approaches to this.

Budget Based On Percent Of Revenue

Determine an ideal percentage of your total revenue to devote to marketing. Generally speaking, you should allocate anywhere from 5-15% of your total revenue for marketing expenses. One advantage to taking this approach is that it helps to ensure that your marketing budget stays in line with the growth of your business. Another plus is that it’s easy to adjust your budget each month or quarter as needed.

Budget Based On Objective And Task

This approach involves anticipating the costs of the elements involved in implementing your strategy, such as copywriting, graphic design, website updates, boosted posts, ad placements in traditional media, video production — everything! List them down and then assign a dollar amount to each item.

This is a good option if you’re dealing with specific projects or campaigns and want to stay on top of your spending.

Budget Based On Competitors

If you have competitors in the space, compare their marketing spend with yours and make sure that you are competing at the same level. This will help ensure that you don’t get outpaced by the competition.

This tack is recommended if you want to stay ahead of the competition, gain visibility in the market, or launch a new product.

Fund Your Plan

Marketing can be expensive, but it doesn’t have to break the bank. There are easy loans online, like CreditNinja available for small businesses that offer flexible repayment options and competitive interest rates. This can help you get the capital needed to fund your marketing budget without having to dip into your savings.

Track Your Results

Once you’ve set your budget, it’s important to track the results of your marketing campaigns. Track how much money you spend and how many sales or leads you generate. This will help you know whether you are getting a good return on your investment and if it’s worth increasing or decreasing your budget.

Return on Investment (ROI) is a measure of how much money a company makes from its investments. It’s calculated by taking the total profits earned from an investment and dividing it by the total cost of the investment. The resulting figure is expressed as a percentage, with a higher percentage indicating greater profitability.

ROI is a key indicator of whether your marketing efforts were successful. It allows you to identify the most effective strategies and adjust your budget accordingly.


Small businesses can face many challenges, but with the right planning and tools, you can market them effectively and successfully turn a profit. By defining your marketing goals, understanding your target market, setting a budget, and tracking results, you’ll be able to make smart decisions about how much to spend on your efforts to make your business known.

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